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The nexus of electricity consumption, economic growth and CO2 emissions in the BRICS countries

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Author Info

  • Wendy N. Cowan

    ()
    (Department of Economics, University of Pretoria)

  • Tsangyao Chang

    ()
    (Department of Finance, Feng Chia University, Taichung, Taiwan)

  • Roula Inglesi-Lotz

    ()
    (Department of Economics, University of Pretoria)

  • Rangan Gupta

    ()
    (Department of Economics, University of Pretoria)

Abstract

This study reexamines the causal link between electricity consumption, economic growth and CO2 emissions in the BRICS countries (i.e., Brazil, Russia, India, China, and South Africa) for the period 1990-2010, using panel causality analysis, which accounts for dependency and heterogeneity across countries. Regarding the electricity-GDP nexus, the empirical results support evidence on the feedback hypothesis for Russia and the conservation hypothesis for South Africa. However, a neutrality hypothesis holds for Brazil, India and China, indicating neither electricity consumption nor economic growth is sensitive to each other in these three countries. Regarding the GDP-CO2 emissions nexus, a feedback hypothesis for Russia, a one-way Granger causality running from GDP to CO2 emissions in South Africa and reverse relationship from CO2 emissions to GDP in Brazil is found. There is no evidence of Granger causality between GDP and CO2 emissions in India and China. Furthermore, electricity consumption is found to Granger cause CO2 emissions in India, while there is no Granger causality between electricity consumption and CO2 emissions in Brazil, Russia, China and South Africa. Therefore, the differing results for the BRICS countries imply that policies cannot be uniformly implemented as they will have different effects in each of the BRICS countries under study.

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Bibliographic Info

Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201340.

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Length: 27 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:pre:wpaper:201340

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Keywords: Electricity Consumption; Economic Growth; CO2 Emissions; BRICS Countries; Dependency and Heterogeneity; Panel Causality Test;

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Cited by:
  1. Kargi, Bilal, 2014. "Electricity Consumption and Economic Growth: Long-Term Co-Integrated Analysis on Turkey," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 285-293.
  2. KARGI, Bilal, 2014. "Electricity Consumption and Economic Growth: A Long-Term Co-integrated Analysis for Turkey," MPRA Paper 55699, University Library of Munich, Germany.

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